New Delhi: The government has not yet fixed any timeline for the public offering of Indian Oil Corp (IOC), even as the share sale of Oil and Natural Gas Corp (ONGC) is likely by March 2011, petroleum secretary S. Sundareshan said on Thursday.

“There is no question of deferring or postponing (of the follow-on public offer of IOC) as no decision on timing of the FPO had ever been taken," he said.

IOC had last month appointed six merchant bankers for the sale of 10% equity shares in the FPO that its chairman B. M. Bansal said was planned for 3rd or 4th week of January.

“Approval for IOC divestment are not yet in place. The Cabinet has not yet approved the sale. Only after that can timing etc can be fixed," Sundareshan said.

The timing of the IOC FPO would be decided in consultation with the Department of Disinvestment, he said.

IOC is planning a fresh equity issue of 10% of existing paid-up capital to mop up Rs9,000 crore for its expansion projects. Along with this, the government will sell 10% of the pre-issue equity capital through follow-on or further public offers (FPO) in the domestic market.

Industry sources said IOC public offering may have been pushed behind ONGC as rising global oil prices have made the nation’s largest oil firm less attractive to investors. IOC sells diesel, domestic LPG and kerosene at government control rates, which are way lower than market price.

The Cabinet, on 1 December, had approved sale of government’s 5% stake in ONGC, the nation’s highest profit earning firm, to raise up to Rs13,000 crore.

The FPO of ONGC is planned for mid-February or early March, a month earlier than previously planned.

“Merchant bankers for the ONGC FPO will be appointed by January," a source said.

Post offer, the government shareholding in ONGC would come down to 69.14% from current 74.14%.

Ahead of the share sale, ONGC is doing a share split, bonus share and issuing of special dividend.

ONGC will split equity shares with a face value of Rs10 each into two shares of Rs5 each. It will also issue a 1:1 bonus share -- one new share for every existing equity held by shareholders -- and will pay a special dividend out of its cash reserves of around Rs15,000 crore.

After the share split and bonus issue, the market value of ONGC’s shares will dip to around Rs335, as against today’s closing price of Rs1,344.45 on the Bombay Stock Exchange and it is expected this will be an attractive level for retail investors to subscribe to the company.

The government plans to raise Rs40,000 crore through disinvestment of its minority stake in public sector units in the current fiscal, up from around Rs25,000 crore in 2009-10.